Hollywood Beach CRA the target of moves to cut its funding, or kill it

Rendering of Margaritaville Hollywood Beach Resort. Photo: City of Hollywood

Hollywood City Commissioner Peter Hernandez says the Beach Community Redevelopment Agency should be abolished because it has had increasing property tax funds for its use — at times exceeding its needs — while the “rest of the city is starving” to pay for operations and needed improvements.

While his proposal has yet to gain support from his colleagues, Hernandez and other city commissioners, who also serve as directors of the CRA, have directed the city’s staff to explore options that would redirect the Hollywood Beach CRA funds left over at the end of the year to the city. Such a revenue give back would mark a first for a CRA in Broward.

In the past, the Hollywood Beach CRA has been accused in a state audit of circumventing state law by rolling over end-of-the-year funds to the next year, a large part of which in recent years has backed the $147 million Margaritaville hotel-entertainment complex in the redevelopment area. The complex is expected to open in October.

In suggesting that the Beach CRA should be abolished, Hernandez said the district — which encompasses less than a square half-mile at 293 acres — “is not really blighted and a slum.’’ Those conditions, he said, are to be met to qualify for redevelopment funds under state law.

The city, Hernandez said, has been operating on “bare bones budgets” while the CRA has given $28 million in incentives to the private developer of Margaritaville. In addition, the city gave developer Lon Tabatchnick valuable, city-owned beachfront land for the project and endorsed construction of a $38 million parking garage project using bonds to be paid back with parking revenues over 30 years.

Peter Hernandez

The CRA district was established in 1997. According to city documents, property values there have jumped since the initial assessment of $546 million. Property in the district is now assessed at about $2.7 billion, which will bring in about $27 million in tax revenue, according to the city’s new annual budget that starts Oct. 1.

Abolishing the Beach CRA and redirecting its tax revenues to the city, Hernandez said, could result in Hollywood being able to cut its citywide property tax rate, the highest among municipalities in Broward County, by 1.5 mills — or $1.50 for every $1,000 of assessed property value.

CRA executive director Jorge Camejo did not respond to repeated calls for comment.

With the city in need of funds for operations and other purposes, city officials, at the urging of some commissioners, have presented a variety of proposals aimed at shifting to the city a sizeable portion of an estimated $5 million in anticipated unused end-of-year CRA funds for the coming year.

The Beach CRA gets is revenue from tax increment funds levied on property within its redevelopment boundaries. The $5 million in anticipated unused funds are drawn from four sources: Hollywood, $2.7 million; Broward County, $2 million; Children’s Services Council, $179,000 and the South Broward Hospital District, $54,000.

Unless the city finds a way to shift the money, the funds must be spent on redevelopment within the CRA’s boundaries.

LOOKING AT OPTIONS

City officials are examining a variety of options to obtain the CRA funds – from having the CRA proportionally refund unused tax dollars as outlined above, with the city receiving only $2.7 million, to reducing the percentage of tax increment funds earmarked to the Beach CRA, resulting in the city receiving $4.7 million, or even abolishing the CRA.

Abolishing the Beach CRA, however, would endanger $116 million in projects in the CRA district, including installing underground utilities, the reconfiguration of the Hollywood Boulevard Bridge over the Intracoastal Waterway, and street flooding/drainage improvements, according to a city document.

Two other options require county approval: one calls for Broward to agree to give up its $2 million to the city, resulting in the city receiving a total of $4.7 million; the other calls for removing the Diplomat Hotel from the CRA, resulting in $3.3 million going to the city rather than the CRA.

Hernandez said he expects city officials to begin discussions with the county soon regarding about how best to proceed.

Ralph Stone, director of the Broward County Housing Finance and Community Development Division, said it “would be a first” should a CRA seek to return unused end-of-the year funds to its municipality for citywide uses.

About a year ago, the county said it planned to monitor and take action against CRAs that hoarded funds at the end of the year rather than spending on needed projects. Under state law, CRAs that have funds at the end of the year must spend that money on projects to be completed in three years or pay down debt. If not, CRAs must return the money to the agencies that contributed those public tax dollars.

The county’s concern followed findings by the Broward Inspector General Office that the Margate CRA deliberately mishandled $2.7 million in funds, rolling it over for several years without specific purposes. The Inspector General also found that the Hallandale Beach CRA had $2.2 million in questionable expenditures—an allegation denied by the agency.

In February 2013, the Florida Auditor General cited the Hollywood Beach CRA for failing to report $36.2 million in unspent year-end funds from year 2009-2010 and $34.2 million from 2010-2011.

The Beach CRA, Hernandez said, had “rolled over the funds for Margaritaville.”

Frank Schnidman is a community redevelopment expert/consultant and professor of urban and regional planning at Florida Atlantic University. In an interview, he said that over the years the Hollywood Beach CRA has complied “with the spirit of the law” in its use of end-of-year funds, but added it “has been rolling (funds) over and built up quite a bank account” that was a key funding tool for the city-backed Margaritaville project.

Schnidman said city officials seeking funds for citywide expenses and projects should also consider talking with the county about the option Hernandez has suggested: abolish the Hollywood Beach CRA.

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Latest comments

Hollywood Resident/September 15, 2015

Why does Fl Bulldog keep writing articles that make it sound like Peter Hernandez knows what he is doing. He is the most divisive commissioner in our county, he is the main reason there has been a well documented bad decorum culture during the county meetings and he continually votes for actions to kill things that invest in our great city of Hollywood.

Yeah let’s kill the CRA for Hollywood Beach thus leaving the city’s by far and away #1 source of tax revenue and commerce out in the cold. This is the same Commissioner that voted against Margaritiville ever being built and continually votes against building of new schools that are A rated.

So what would he spend the fund $ on? By his voting record it certainly wouldn’t be for building or supporting good schools or drawing major investment of businesses into our city. It certainly wouldn’t be to continue to support Hollywood as a tourist destination which is our #1 source of revenue and jobs. He is bad for Hollywood and a complete joke and I hope at some point he gets voted off the county board of commissioners. He spends his time and resources finding ways to stymie progress, directed our city police to video tape parents walking their children to a school he didn’t want built and violates people’s civil rights by disallowing a certain group of people to park in a city hall public parking lot. He needs to go.

Too even remotely suggest the CRA’s investment to bring Margaritiville here was a bad use of funds is ridiculous. Does anyone remember what was previously on the property that Margaritiville is being built on? It was a dilapidated dangerous parking structure where a very seedy element spent their time. It would’ve cost the city millions to bring up to today’s current code and most likely needed to be torn down. Now it will be one of the high tax revenue generating pieces of property per square foot in the entire state and will be at the forefront of Florida tourism.

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County Resident/September 18, 2015

I don’t remember Peter Hernandez running for County Commissioner. Did I miss something?

Hollywood Resident/September 18, 2015

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County Resident/September 18, 2015

In three places you refer to him as a county commissioner and you write that you hope he is not reelected to the county board. I’m confused.

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Hollywood Resident/September 18, 2015

He is one of the 6 elected city commissioners that serve on the City Commission. This is an elected position. He was the lone commissioner to vote against the Margarittiville project which in my opinion was absurd and one of the many reasons why I hope he doesn’t get re-elected to serve on the City Commission. Sorry for the confusion, I hope this clarifies my point of view.

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County Resident/September 19, 2015

OK, I get it. I’m not in favor of huge and tall buildings on our beach but I personally did not object to Margaritaville except that the CRA borrowed mega millions against my future tax dollars to grant money to wealthy developers who don’t have to pay it back. We are paying it back with future tax dollars and what if we have another recession? It’s not a far fetched concept.

I feel that if the CRA were to give some of its tax largesse to the city to spend outside the CRA district, it could be used to upgrade infrastructure on the mainland, such as drainage, paving and sewers, so that tax paying businesses would want to come to Federal, Johnson, and west on Hollywood.

All tourists don’t want to stay on a traffic congested beach. Some don’t have big money yet want to enjoy our weather (not yesterday’s weather). They come and stay on the mainland, and spend on the mainland, yet those hotels and motels don’t get any free money. Not that anyone should get ANY free money.

I think that some of the commissioners walked blindly into borrowing mega millions for beach spending and are sorry now that they didn’t see it coming.

There needs to be a balance of spending that would be of help to all areas of the city.

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Hollywood Resident/September 20, 2015

All good points but a few things to consider. It’s not like Margaritiville replaced a single story property. It replaced a very high dilapidated parking lot. There was already a high rise structure there. The only difference is that structure was falling apart and was an eye sore to the beach and was a magnet for drug deals, loitering and homeless people.

Additionally Margaritiville may be getting some good terms from the city and
I agree with you in that I too don’t believe in over-development however this agreement forced the developers to fund many multimillion dollar community initiatives as well. Did you know they had to restore the historic amphitheater right next to the hotel at their cost. Also part of this deal the developers had to fund a multimillion dollar deal to tear down and move the homeless shelter on Federal that was causing some my crime and driving local businesses out. This would’ve never happened without the Margaritiville deal.
This was a once in a generation opportunity which will be one the staples and huge attractions of the entire state here in our own city for years to come.

I fully agree Federal needs more tax dollars as well and in fact if you really evaluate what the city has done it has also improved immensely. Remember the abandoned car dealership on the corner of federal and sheridan. It is now a beautiful shopping center. There is still a long way to go for Federal but many new legit businesses have now been slowly coming back to the street since the homeless shelter is gone which was because of the margaritiville project. My problem with this article is it is making it seem like this project has taken away so many things for the city which couldn’t be more untrue. Our city commissioners (other than Hernandez) struck a great deal and forcing Margaritiville to make many investments in our community that happened very quickly which we didn’t even have close to the funds to do without them.

With regards to the motels on Federal I also agree the legit ones should get more help from the city. However as I’m sure you know many of these aren’t legit businesses and in fact quite a few are nothing more than a front for drug deals and prostitution. The city has tried to be more forceful to enforce existing ordinances for the motels that aren’t keeping their properties up to snuff. Also they have new ordinances on the type of business that can now come to federal and they do in fact give those type of business some nice tax advantages as well.

I appreciate your commentary and residents like you who care about this city as much as me. I just worry when a biased article comes out creating a perception and taking shots at an easy target just because they are developers. Not all development projects are bad or evil which what this writer seems to want you to believejust to attract readers. This writer is constantly bringing up and taking the side of the lone city commissioner against this and other community projects and schools. If you go to the city meetings it is well known he is the most divisive person on the city commission and lacks decorum. I just feel the need to state the other side of the story to quality residents like you.

Regards,

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Another City Resident/September 21, 2015

You people just don’t get it do you?! This has been THE MOST ill-managed city I’ve had the displeasure of living in EVER!!! Why in the hell do you people keep reelecting the same politicians over and over again?!?!?!? It’s incestual! You have this City Manager who knew that City Manager who hired another assistant city manager who left for another city, but came back. You have a mayor who’s leaving, and whose position will be sought after by a term-limited county commissioner, and perhaps a term-limited state legislator. The Mayor’s position may even be sought after by a current city commissioner! Does NOBODY see how f-ed up this all is?!?!?!?

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County Resident/September 21, 2015

Really really have to agree with you but not on every count. The worst city manager ever was Riverboat. She was a bad mommy who wanted all of her kids to like her best so she kept them fighting among themselves for her attention, which let the wolves and the pigs in.

We are starting to see some healthy changes made by our new City Manager.

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Another one more City Resident.-
Commissioner Peter Hernandez is not a professional politician. Is a private
business owner second generation in Hollywood. Who went to the City Commission to do his best for his city. As a business man familiar with operating costs is only reasonable to understand the fact that a prime business
location is not to be given for free, much less pay to get it developed. Which seems to be his reason for not accepting all the premiums given to Margarita
developers who if they did not have sufficient capital to develop it, others should have been selected with full pockets. Perhaps the rest of the commissioners got
tired of waiting when two or three other developers could not make it when perhaps they found too many open hands waiting. I can say this due to my over
thirty years as a business man and Real Estate Broker with international experience in over ten foreign countries.

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john livoti/September 23, 2015

More then half the people I’ve asked about the Margarite-a-Pill …. are against destroying the quaintness, easy access and parking with our Beach the way it’s been for many, many years.. some others I ask don’t know what city it’s in ..!! I would Be Right Along with Peter Hernandez in voting down that: .. In YOUR FACE .. Ugly BIG Development ruining & damaging what was a laid back ,fun home town beach. People from Ft. Lauderdale and Miami came here to get away from their own hectic , hard to parking Beaches. And Mr. Hernandez is also looking how the TAX MONEY is being spent …. He’s Smart ! .. counting up 50 Million in INCENTIVES .!! ..B/S

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Hollywood Resident/October 1, 2015

Amazing the misinformation here. Umm Margaritiville’s parking is public parking. Actually it is providing more public spots than the previous structure and obviously a much safer structure. It also has build a beautiful new public restroom on the beach and restored the amphitheater. Yeah their getting incentive’s but if anyone things they are getting into the Beach on the cheap they are kidding themselves. They had to invest millions in other projects that serve the community of hollywood separate from the resort.

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